Isaac Lieberman – the “Flash-Crash” trader

Isaac Lieberman loves a good flash crash.

Аt a time when many currency-trading firms don’t know what to do when extreme price fluctuations hit, Lieberman’s brought together a bunch of military and tech gurus to form a firm — Aston Capital Management — that’s designed to thrive at those moments. When others shut down, it gears up.

“We get very excited about flash events because it gives us data to work with that’s very hard to come by,” Lieberman said. “You can’t simulate things like this.”

“A flash crash or an event could be an opportunity for a currency manager” who specializes in volatility, said Alison Romano, senior investment officer at Florida’s State Board of Administration, which manages the state pension plan. “I want my managers to be taking advantage of that.”

During a flash crash, “what we like to understand is when it hits the wall, which is the hardest to find, but the most opportune to trade into,” Lieberman said in his three-man office with a view of the Statue of Liberty. “At a certain point, it simply stops and prices start to go back to fair value.”

For many in the market, flash events are a time to play it safe. Dori Levanoni, a partner at First Quadrant, a Pasadena- based hedge fund that manages about $12.6 billion in currency strategies, said that portfolio managers and traders can hit the pause button and wait for better market conditions before placing orders.

This is Lieberman’s cue to spring into action.

“We try to put together a collage, a story of what happened,” he said, “so we can understand it.”

source: Bloomberg

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